Monday, March 17, 2008

Alan Greenspan comes clean

The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the second world war. It will end eventually when home prices stabilise and with them the value of equity in homes supporting troubled mortgage securities.

This means, presumably, that he thinks we may be about to enter a recession worse than the one in 1981 — and that it's not going to end until house prices stop falling, which probably won't be until 2010 or so. This is bad, right?

Yeah, this is bad.

The Bush administration and the Fed are in the process of bailing out the bankers who assisted the Bush administration in creating this mess. And what do the people who suffer foreclosures Get?

Let's see. They are being foreclosed because Greenspan lowered interest rates, the conservatives deregulated banks, all while Greenspan refused to regulate loose (even non-existent) mortgage underwriting standards - all in the service of pumping more cash into the economy so that Bush would be reelected in 2004 while he paid for the unnecessary war in Iraq and the ridiculous tax cuts for the wealthy. So while the people who were used to pay for all the conservative Republican extravagances get screwed.

Par for the conservative Republican course, isn't it? Like American CEO's - screw everyone else and walk off with the money.